BAPA Chapters 13,14, and 15
Which of the following is characteristic of a know-how agreement? permission to use manufacturing facilities for a fee exchanging technological or management information for royalties exclusive rights to reproduce original art work trading the use of a name brand for management advice
exchanging technological or management information for royalties
Which of the following is a characteristic of direct exporting? exporter develops a closer relationship with foreign buyers exporter delegates responsibility of finding buyers exporter contracts with domestic intermediaries exporter uses few corporate resources and personnel
exporter develops a closer relationship with foreign buyers
Which of the following is a characteristic of an equity joint venture? - facilitates knowledge transfer between partners -simple management structure - lesser exposure to political risk - easy to terminate
facilitates knowledge transfer between partners
When a firm allows others to use an entire business system in exchange for compensation, the arrangement is known as ________
franchising
If a computer contains a microprocessor from Costa Rica and a hard disk drive from the Philippines, the computer manufacturer, who is based in Texas and operates across Europe and West Asia, most likely uses ________ as an entry strategy.
global sourcing
Which of the following is an essential method used by a focal firm to protect its intellectual property in a foreign country? lobbying foreign governments for stronger intellectual property laws password-based security systems avoiding trade in countries with weak intellectual property laws bribing foreign government officials
password-based security systems
Which of the following activities is highly important to firms as a strategic asset? manufacturing of parts marketing and branding sales and distribution customer service
marketing and branding
Which of the following activities is highly important to firms as a strategic asset? sales and distribution manufacturing of parts marketing and branding customer service
marketing and branding
The procurement of selected value-adding activities, including production of intermediate goods or finished products, from independent suppliers is known as ________.
outsourcing
In a system franchising agreement, the franchisor provides ________.
production and marketing methods
Which of the following services cannot be exported? insurance services education pure services construction
pure services
Before undertaking contractual entry strategies abroad, management ________. should keep information about intellectual property confidential from all franchisees in countries with weak anti-piracy laws should bribe government officials to ensure protection of intellectual property understand and follow subjective moral and ethical standards across markets should register patents and copyrights with local government
should register patents and copyrights with local government
Before undertaking contractual entry strategies abroad, management ________.
should register patents and copyrights with local governments
Which of the following is protected under copyright laws? the Nike swoosh the art of Jackson Pollack Winnie the Pooh image McDonald's clown shaped man with puffed out costume legs
the art of Jackson Pollack
Which of the following is protected under copyright laws the art of Jackson Pollack Winnie the Pooh image McDonald's clown shaped man with puffed out costume legs the Nike swoosh
the art of Jackson Pollock
Which of the following must be considered in selecting foreign direct investment locations? rate of inflation tax rates for profit repatriation stability of currency All of these
All of these
Professional service firms, such as PriceWaterhouseCooper, often enter large international markets through FDI but usually use ________ to enter small markets. BOT arrangement turnkey contracting affiliates equity-based collaborative ventures
Affilliates
Which of the following is an example of licensing? A South-Korean consumer electronics manufacturer produces the screens for its brand of television and sends orders to a factory in China to manufacture the casing for the television. A U.K-based motorcycle manufacturer, produces limited-edition customizations of the company's stock models and sells it to customers around the world. An American electronics firm has given the right to a new process for manufacturing e-book readers to an electronics manufacturer in Canada. An Indian automobile manufacturing company buys engines from a Japanese manufacturer for its environmentally-friendly cars.
An American electronics firm has given the right to a new process for manufacturing e-book readers to an electronics manufacturer in Canada.
A(n) ________ is the purchase of an existing company or facility.
Aquisition
The nation of Azoo needs the assistance of a contractor to construct a new bridge and a subway system. The nation lacks the skilled labor and technical know-how to handle such large-scale projects. Representatives of the Azoo government are reviewing the project bids provided by two different international contractors. Contractor A proposes a turnkey contract for Azoo. Contractor B proposes a build-operate-transfer arrangement. Which of the following most likely supports Azoo government's decision to award the project bid to Contractor A? Azoo leaders want immediate ownership of the public projects. Azoo leaders want long-term help with operation of the subway. Azoo lacks qualified workers to maintain public works projects. Azoo lacks the financial resources to purchase large machinery.
Azoo leaders want immediate ownership of the public projects.
Which of the following is the best example of a back-office BPO activity? billing marketing technical support customer service
Billing
Fun Play Global Sourcing (Scenario)Fun Play Inc., a company manufacturing toys for children, has decided to outsource some of its value-chain activities. However, the firm has no experience with global sourcing and has hired a consulting firm to assist its managers. The consulting firm has been assigned the task of determining which activities should be outsourced and where the outsourced activities should be located. Which of the following would most likely be considered by the consultants while deciding whether to keep each value-adding activity in the home country or locate it in a foreign country? Who will be responsible for training suppliers in foreign locations? Can different value-adding activities be effectively configured across the world? What are the odds in favor of Fun Play's dominating the children's toy segment in its home country? Would the HR department of Fun Play be able to ensure smooth repatriation for managers after they complete their assignments abroad?
Can different value-adding activities be effectively configured across the world?
________ refers to sourcing from the firm's own production facilities.
Captive sourcing
Focal firms that internationalize through exporting will most likely perform ________ in the home market.
manufacturing
Which of the following is true with regard to the risks of global sourcing? - Environmental challenges exclude currency fluctuations, tariffs and other trade barriers, high energy and transportation costs. - Firms that source from countries whose currencies are strengthening experience lower costs. - Global sourcing weakens competition leading to a considerably risk-free international business environment. - Inadequate legal systems, red tape, convoluted tax systems, and complex business regulations complicate local operations in many countries.
Inadequate legal systems, red tape, convoluted tax systems, and complex business regulations complicate local operations in many countries
Which of the following statements is true about international franchisors? - Franchisees may use franchise knowledge to start a competing business. - Franchisors need to invest substantial capital. - Entry into numerous foreign markets is tough and costly. - Maintaining control over franchisees is seldom difficult.
Franchisees may use franchise knowledge to start a competing business.
Which of the following is true with regard to global sourcing? Global sourcing refers to the relocation of a business process or entire manufacturing facility to a foreign country. Global sourcing is a low-control strategy in which the focal firm sources from independent suppliers through contractual agreements. Global sourcing does not represent the firm's initial involvement in international business. Global sourcing has declined significantly in the current phase of globalization.
Global sourcing is a low-control strategy in which the focal firm sources from independent suppliers through contractual agreements.
Big Boy Burgers (BBB) is an American fast food restaurant chain that has franchises around the world. Recently, BBB managers have been concerned about protecting the firm's intellectual property, which includes the recipes for its unique burger sauces and specialty burger buns. Although BBB has never experienced a theft of intellectual property, the firm's managers feel BBB should be more cautious. Managers are meeting with security and legal experts to discuss the options available to the firm which would protect BBB from future international problems. Which of the following statements most likely supports BBB legal experts fully investigating the intellectual property laws of each nation in which BBB has franchises? - Nations with numerous IPR violators are beginning to comply with the WTO. - TRIPS protects the intellectual property of firms doing business in any nation. - Intellectual property laws and its enforcement varies from country to country. - Patents and trademarks granted in one country will transfer to another country.
Intellectual property laws and its enforcement varies from country to country.
Big Boy Burgers (Scenario)Big Boy Burgers (BBB) is an American fast food restaurant chain that has franchises around the world. Recently, BBB managers have been concerned about protecting the firm's intellectual property, which includes the recipes for its unique burger sauces and specialty burger buns. Although BBB has never experienced a theft of intellectual property, the firm's managers feel BBB should be more cautious. Managers are meeting with security and legal experts to discuss the options available to the firm which would protect BBB from future international problems. Which of the following questions would be more important for the experts to evaluate when determining how to ensure intellectual property protection for Big Boy Burgers? What should be the penalties for theft of the recipes for their unique burger sauces and specialty burger buns? How are BBB franchisees modifying recipes and menus to meet the needs and desires of customers in local markets? What are the commonly counterfeited goods in the market? Is BBB partnering with ethical franchisees that have no intention of becoming BBB competitors in the future?
Is BBB partnering with ethical franchisees that have no intention of becoming BBB competitors in the future?
Which of the following statements is true of infringement of intellectual property? - It is the ability to control important intellectual property before it reaches competitors. - Counterfeiting and piracy can be particularly troublesome in advanced economies because of subjective ethical standards. - It amounts to piracy and takes the form of production and distribution of counterfeit goods. - The most commonly counterfeited goods include heavy machinery and computer manufacturing.
It amounts to piracy and takes the form of production and distribution of counterfeit goods.
Which of the following statements is true of infringement of intellectual property? It is the ability to control important intellectual property before it reaches competitors. The most commonly counterfeited goods include heavy machinery and computer manufacturing. It amounts to piracy and takes the form of production and distribution of counterfeit goods. Counterfeiting and piracy can be particularly troublesome in advanced economies because of subjective ethical standards.
It amounts to piracy and takes the form of production and distribution of counterfeit goods.
Which of the following is an advantage of exporting? - It increases overall sales volume, improves market share, and reduces per-unit costs of manufacturing. - It is a high-control strategy that requires substantial resource commitment when compared to equity joint ventures. - It allows focal firms to attain maximum control by establishing ownership of key assets in the foreign market. - It minimizes exposure to tariffs and other trade barriers, as well as fluctuations in exchange rates.
It increases overall sales volume, improves market share, and reduces per-unit costs of manufacturing.
Which of the following is an advantage of exporting? It allows focal firms to attain maximum control by establishing ownership of key assets in the foreign market. It minimizes exposure to tariffs and other trade barriers, as well as fluctuations in exchange rates. It is a high-control strategy that requires substantial resource commitment when compared to equity joint ventures. It increases overall sales volume, improves market share, and reduces per-unit costs of manufacturing.
It increases overall sales volume, improves market share, and reduces per-unit costs of manufacturing.
The likelihood of internalizing ________ rather than outsourcing it is considerably high.
R&D
Which of the following is true about franchising as an entry strategy? It restricts a firm's ability to expand more rapidly abroad. It is typically characterized as an unstable, short-term entry strategy. It is an ownership-based international business activity. It provides firms with minimum control over foreign operations.
It restricts a firm's ability to expand more rapidly abroad.
An Italian car company, Ciao, has made plans to expand its operations by building a manufacturing facility in a foreign market. Ciao has been very successful selling its small, economical, and stylish cars in Italy and Spain, and firm managers believe that Ciao cars will be equally profitable in other markets. Ciao managers are trying to determine whether Canada or Russia would be the best location for a new automobile manufacturing facility. Which of the following most likely supports the decision by Ciao managers to build a plant in Russia? - Intellectual property lawsuits are common in Russia. - Ciao would be able to take advantage of the North American Free Trade Agreement. - The Russian government is transparent and totally corruption-free. - Land and construction costs are relatively inexpensive in Russia.
Land and construction costs are relatively inexpensive in Russia.
Ciao Manufacturing Location (Scenario)An Italian car company, Ciao, has made plans to expand its operations by building a manufacturing facility in a foreign market. Ciao has been very successful selling its small, economical, and stylish cars in Italy and Spain, and firm managers believe that Ciao cars will be equally profitable in other markets. Ciao managers are trying to determine whether Canada or Russia would be the best location for a new automobile manufacturing facility. Which of the following most likely supports the decision by Ciao managers to build a plant in Russia? The Russian government is transparent and totally corruption-free. Intellectual property lawsuits are common in Russia. Ciao would be able to take advantage of the North American Free Trade Agreement. Land and construction costs are relatively inexpensive in Russia.
Land and construction costs are relatively inexpensive in Russia.
________ is an arrangement in which a contractor supplies managerial know-how to operate a hotel, hospital, airport, or other facility in exchange for compensation.
Management contract
ABC Appliance (Scenario)The ABC Appliance Corporation is a Florida-based manufacturer of refrigerators, dishwashers, and other large household appliances. ABC takes advantage of NAFTA, and as a result, the firm has loyal customers across North America. ABC managers would like to expand into the Asian market, but are unsure of the best way to do so. ABC managers are meeting to discuss various possibilities for entering the Asian market. Which of the following most likely supports a decision to enter the Asian market through a project-based, non-equity collaborative venture with an Asian appliance manufacturer to create an environmentally-friendly dishwasher? Managers of both firms have decided not to seek ownership, rather they have decided to pool resources. ABC managers have the financial resources to quickly build a new Asian plant. The Asian government has offered incentives to ABC if the firm builds a plant. Asian firms have offered to pool their resources with ABC to create a new legal entity.
Managers of both firms have decided not to seek ownership, rather they have decided to pool resources.
The Organic Towel Company (OTC) employs 400 workers at its facility in Liverpool, England, where the firm has been manufacturing 100% organic cotton towels for five years. OTC sells towels in the United Kingdom primarily to boutique hotels and specialty retail stores, as well as to individual consumers through the company's. Recently, OTC managers attended a trade show in London where they made contact with numerous foreign market managers. OTC received a request from Earth Waves, an organic clothing store in Toronto, Canada, for a large order of towels. OTC had not been looking into expanding, but firm managers are seriously considering the opportunity to reach a global niche market with their towels. Which of the following most strongly suggests OTC should not export its towels to Earth Waves? - OTC managers are risk-takers with the determination to expand OTC. - Earth Waves has a large client base and publishes a semi-annual catalog. - Earth Waves has offered to guide OTC through Canadian regulations. - OTC's towel manufacturing at the Liverpool facility is nearing maximum capacity.
OTC's towel manufacturing at the Liverpool facility is nearing maximum capacity.
Which of the following is true with regard to offshoring? With rapid globalization and internationalization of businesses, offshoring is a visibly declining trend. Offshoring substantially reduces the overall efficiency of MNEs. Offshoring is common in the service sector, including banking, software code writing, legal services, and customer-service activities. Russia is the current leader in the processing of advanced economies' relocated business services.
Offshoring is common in the service sector, including banking, software code writing, legal services, and customer-service activities
Which of the following statements is true with regard to the R&D activities of a firm? R&D activities have a high likelihood of being outsourced. As a strategic asset, R&D activities are of moderate importance to the firm. R&D activities have a low likelihood of being internalized. R&D activities are usually concentrated at home.
R&D activities are usually concentrated at home.
_______ will internationalize via FDI because they require direct contact with customers.
Retailing firms
________ will internationalize via FDI because they require direct contact with customers.
Retailing firms
Which of the following is a disadvantage of equity joint ventures? lesser control over future directions termination difficulties vague contractual partnership imbalanced relationship
Termination Difficulties
Wonder Cat is a popular, new cartoon series created by the U.S-based All Cartoon Channel (ACC). Currently, the only Wonder Cat item available for sale are shirts that are sold exclusively through the ACC Web site. The cartoon series is a big hit in China, and as a result ACC has been approached by a Chinese firm about a licensing agreement. ACC executives are considering the pros and cons of such an agreement before making any final decisions. Which of the following statements most likely supports an ACC decision to enter into a licensing agreement with the Chinese firm? The Wonder Cat brand's products could be easily counterfeited in other markets except in the Chinese markets. The Chinese government restricts complete ownership of local operations by foreign firms. China exclusively opts for high-control strategies such as FDI. Royalties from toys and apparel would be initially minimal.
The Chinese government restricts complete ownership of local operations by foreign firms.
Which of the following is most likely to occur if a U.S. firm outsources some of its business operations to a Japanese company, and the Japanese yen strengthens against the dollar? The U.S. company will experience higher costs in using the services of the Japanese company. The probability of intellectual property laws being enforced would significantly decrease in Japan. Outsourcing business operations to Japan would become less expensive. The U.S. company will experience additional cost savings in using the services of the Japanese company.
The U.S. company will experience higher costs in using the services of the Japanese company.
Wonder Cat is a popular, new cartoon series created by the U.S-based All Cartoon Channel (ACC). Currently, the only Wonder Cat item available for sale are shirts that are sold exclusively through the ACC Web site. The cartoon series is a big hit in China, and as a result ACC has been approached by a Chinese firm about a licensing agreement. ACC executives are considering the pros and cons of such an agreement before making any final decisions. Which of the following statements most likely supports an ACC decision to enter into a licensing agreement with the Chinese firm? - The Wonder Cat brand's products could be easily counterfeited in other markets except in the Chinese markets. - Royalties from toys and apparel would be initially minimal. - The Chinese government restricts complete ownership of local operations by foreign firms. - China exclusively opts for high-control strategies such as FDI.
The Wonder Cat brand's products could be easily counterfeited in other markets except in the Chinese markets.
Which of the following activities is applicable to the final stage of exporting? The firm modifies advertising and public relations to suit individual markets. The firm acquires product development and foreign language skills. The firm engages appropriate bankers and international trade attorneys. The firm screens the most attractive export markets.
The firm modifies advertising and public relations to suit individual markets.
Which of the following is characteristic of exclusive licensing agreements? The licensee is prohibited from sharing the licensed asset with another company within a specified region. The licensor is not allowed to interfere with the production or marketing of the licensed asset. The licensee cannot cancel the contract with the licensor even if sales of the licensed asset are poor. It ensures payment from the licensee to the licensor upon receipt of an export shipment.
The licensee is prohibited from sharing the licensed asset with another company within a specified region.
Which of the following is true with regard to strategies for minimizing the risks of global sourcing? -Because production quality in an emerging market rarely varies over time, managers at the focal firm are not obliged to closely monitor manufacturing processes. -To maximize returns and minimize risks, management should outsource core business operations. -To ensure the success of sourcing ventures, the focal firm must exercise great care to identify and screen potential suppliers and then monitor the activities of those suppliers from which it sources. -Firms must refrain from maintaining their own sourcing operations abroad in order to trim costs and minimize risks stemming from frequent currency fluctuations.
To ensure the success of sourcing ventures, the focal firm must exercise great care to identify and screen potential suppliers and then monitor the activities of those suppliers from which it sources.
________ is an arrangement in which the focal firm or a consortium of firms plans, finances, organizes, manages, and implements all phases of a project abroad and then hands it over to a foreign customer after training local workers.
Turnkey contracting
ABC Appliance (Scenario)The ABC Appliance Corporation is a Florida-based manufacturer of refrigerators, dishwashers, and other large household appliances. ABC takes advantage of NAFTA, and as a result, the firm has loyal customers across North America. ABC managers would like to expand into the Asian market, but are unsure of the best way to do so. ABC managers are meeting to discuss various possibilities for entering the Asian market. Which of the following should most likely be considered in making the decision to expand ABC operations into the Asian market? How will ABC utilize the Internet to achieve success in the Asian market? What technological and managerial know-how can ABC gain from an Asian expansion? How will domestic competitors of ABC react to an international expansion? How many managers will need to relocate to Asia to oversee the Asian project?
What technological and managerial know-how can ABC gain from an Asian expansion?
An Italian car company, Ciao, has made plans to expand its operations by building a manufacturing facility in a foreign market. Ciao has been very successful selling its small, economical, and stylish cars in Italy and Spain, and firm managers believe that Ciao cars will be equally profitable in other markets. Ciao managers are trying to determine whether Canada or Russia would be the best location for a new automobile manufacturing facility. Which of the following questions is most important for Ciao managers to evaluate in their decision regarding the location of the new manufacturing facility? - How much time will it take to train managers in Canada and Russia? - What other industries manufacture products in Canada and Russia? - How should the current marketing strategies be modified to serve markets in Canada and Russia? - What would be the costs and availability of skilled labor in Canada and Russia?
What would be the costs and availability of skilled labor in Canada and Russia?
Ciao Manufacturing Location (Scenario)An Italian car company, Ciao, has made plans to expand its operations by building a manufacturing facility in a foreign market. Ciao has been very successful selling its small, economical, and stylish cars in Italy and Spain, and firm managers believe that Ciao cars will be equally profitable in other markets. Ciao managers are trying to determine whether Canada or Russia would be the best location for a new automobile manufacturing facility. Which of the following questions is most important for Ciao managers to evaluate in their decision regarding the location of the new manufacturing facility? How should the current marketing strategies be modified to serve markets in Canada and Russia? What other industries manufacture products in Canada and Russia? What would be the costs and availability of skilled labor in Canada and Russia? How much time will it take to train managers in Canada and Russia?
What would be the costs and availability of skilled labor in Canada and Russia?
Which of the following is characteristic of cross-border contractual relationships? - When compared to FDI, they are less susceptible to volatility and risk, and tend to bring both parties a predictable stream of revenue. - They are governed by a contract that provides the focal firm with no control over the foreign partner. - It attracts high attention and criticism for the focal firm because of the local perception of foreign entities. - The focal firm attains maximum control by establishing a physical presence, and ownership of key assets, in the foreign market.
When compared to FDI, they are less susceptible to volatility and risk, and tend to bring both parties a predictable stream of revenue.
Which of the following is an example of trademark licensing agreement? - a U.S.-based clothing company that opens a factory in Vietnam and Cambodia to utilize low-labor costs - a U.K.-based cosmetics manufacturer that is allowed to use an American cosmetics manufacturing firm's logo for its new line of "Titanium" makeup products - a Thailand-based pharmaceutical company that receives manufacturing knowledge from a U.S-based pharmaceutical - a China based consumer electronic company that has invented a flexible casing for its MP3 players
a U.K.-based cosmetics manufacturer that is allowed to use an American cosmetics manufacturing firm's logo for its new line of "Titanium" makeup products
Global sourcing becomes a catalyst to overhaul organizational processes and company operations and increases the firm's overall competitive advantages by ________.
allowing firms to free expensive analysts, engineers, and managers from routine tasks to spend more time on high-value-adding activities
Contract manufacturing can best be defined as ________.
an arrangement in which the focal firm contracts with an independent supplier to manufacture products according to well-defined specifications
Which of the following is an example of trademark licensing agreement? a U.S.-based clothing company that opens a factory in Vietnam and Cambodia to utilize low-labor costs a U.K.-based cosmetics manufacturer that is allowed to use an American cosmetics manufacturing firm's logo for its new line of "Titanium" makeup products a Thailand-based pharmaceutical company that receives manufacturing knowledge from a U.S-based pharmaceutical a China based consumer electronic company that has invented a flexible casing for its MP3 players
a U.K.-based cosmetics manufacturer that is allowed to use an American cosmetics manufacturing firm's logo for its new line of "Titanium" makeup products
In a licensing agreement, the licensee provides ________.
a combination of down-payment plus royalty
Which of the following is provided by the licensor in a licensing agreement? a combination of intellectual property and technical information and assistance a combination of a lump-sum payment and the intellectual know-how a storefront or facility and the necessary materials to make the product a monetary down-payment plus royalties for all products sold locally
a combination of intellectual property and technical information and assistance
Which of the following is an example of a market-seeking motive for FDI? a company intends to avoid trade barriers a firm follows its key customers abroad a firm wishes to gain access to raw materials a company wishes to gain access to knowledge
a firm follows its key customers abroad
A cross-border contractual relationship provides the focal firm with ________ over the foreign partner.
a moderate level of control
Company-owned subsidiary is ________. - accomplished by contracting with intermediaries located in the firm's home market - typically achieved by contracting with intermediaries located in the foreign market - a foreign intermediary that serves as an extension of the exporter, negotiating on behalf of the exporter and assuming such responsibilities as local supply-chain management, pricing, and customer service - a representative office of the focal firm that handles marketing, physical distribution, promotion, and customer service activities in the foreign market
a representative office of the focal firm that handles marketing, physical distribution, promotion, and customer service activities in the foreign market
Which of the following is the most likely motive behind firms in the mining industry wanting to enter new foreign markets?
access to natural resources
Which of the following is the most likely motive behind firms in the mining industry wanting to enter new foreign markets? access to natural resources availability of excessive non-skilled labor force increase in refining capacity payment of wages remain the same in both the new market as well as the existing market
access to natural resources
A firm that develops the capacity to sell its products by investing in marketing and selling operations is ________.
acquiring downstream value-chain facilities
Which of the following is a characteristic of successful international retailers? significant financial borrowings and high foreign and domestic operational costs conservative managers and salespeople and a centralized organizational system extreme competition and support from home-country governments exclusively an entrepreneurial approach to foreign markets and an understanding of the target market
an entrepreneurial approach to foreign markets and an understanding of the target market
Students in Professor Manning's international business class have been assigned the task of explaining the different types of FDI. Professor Manning formed groups among students. The groups are to research their assigned topic and present their information to the class using examples of real-world firms for illustration. Jessica Hanson is the leader of Group A; Manu Patel is the leader of Group B; and Mario Witherspoon is the leader of Group C.During his presentation, Manu describes how a large U.S. retailer entered the Mexican market by purchasing the stores and assets of a Mexican retailer. Which of the following topics was most likely assigned to Group B? acquisition merger turnkey operation collaborative venture
aquisition
Which of the following documents is the contract between the shipping company and the exporter? pro forma invoice bill of lading export declaration commercial invoice
bill of lading
Azoo Government Projects (Scenario)The nation of Azoo needs the assistance of a contractor to construct a new bridge and a subway system. The nation lacks the skilled labor and technical know-how to handle such large-scale projects. Representatives of the Azoo government are reviewing the project bids provided by two different international contractors. Contractor A proposes a turnkey contract for Azoo. Contractor B proposes a build-operate-transfer arrangement. The government of Azoo might select Contractor B in order to ________.
build the projects cost-effectively
Azoo Government Projects (Scenario)The nation of Azoo needs the assistance of a contractor to construct a new bridge and a subway system. The nation lacks the skilled labor and technical know-how to handle such large-scale projects. Representatives of the Azoo government are reviewing the project bids provided by two different international contractors. Contractor A proposes a turnkey contract for Azoo. Contractor B proposes a build-operate-transfer arrangement. The government of Azoo might select Contractor B in order to ________. build the projects cost-effectively increase the number of visitors to Azoo prevent the builder from operating in the country for even a short period of time avoid rental fee, user fee, and tolls during the operational stage of the bridge and subway system
build the projects cost-effectively
Fun Play Inc., a company manufacturing toys for children, has decided to outsource some of its value-chain activities. However, the firm has no experience with global sourcing and has hired a consulting firm to assist its managers. The consulting firm has been assigned the task of determining which activities should be outsourced and where the outsourced activities should be located. If Fun Play decides to source from its own wholly owned subsidiary, it would be engaging in ________. captive sourcing contract manufacturing offshoring cause marketing
captive sourcing
The pattern or geographic arrangement of locations where the firm carries out value-chain activities is known as ________.
configuration of value-adding activity
________ is the primary rationale for sourcing abroad.
cost efficiency
After managers have chosen an appropriate market for exporting, the next step is to ________.
decide about the resources to be committed
Leasing is especially beneficial to ________.
developing economies
In a system franchising agreement, the franchisee provides ________.
down-payment plus royalty
A firm that pursues foreign direct investment to take advantage of government incentives is demonstrating a(n) ________ motive. novelty-seeking asset-seeking market-seeking efficiency-seeking
efficiency-seeking
An advantage of licensing is that firms are able to ________.
enter markets with extensive trade barriers
International Business Class (Scenario)Students in Professor Manning's international business class have been assigned the task of explaining the different types of FDI. Professor Manning formed groups among students. The groups are to research their assigned topic and present their information to the class using examples of real-world firms for illustration. Jessica Hanson is the leader of Group A; Manu Patel is the leader of Group B; and Mario Witherspoon is the leader of Group C. During her presentation, Jessica describes how two automakers joined forces and formed a separate firm by pooling their assets. Which of the following topics was most likely assigned to Group A? greenfield investment equity joint venture acquisition vertical integration
equity joint venture
Which of the following terms is used to refer to a focal firm's partial ownership of an existing firm?
equity participation
Prof. Sean Peterson's class of international business has been studying the controversies surrounding global sourcing. Prof. Peterson divided the class into two groups, A and B. Group A was assigned the task of defending global sourcing, whereas Group B was assigned the task of arguing against global sourcing. The concept of creative destruction can be reasonably used by Group A to support the view that ________. offshoring forces unskilled workers to seek additional education global sourcing creates opportunities and stimulates innovation firms that engage in offshoring are more likely than not to fail in the long run outsourcing technical jobs leads to brain drain
global sourcing creates opportunities and stimulates innovation
A ________ is the firm's integrated network of sourcing, production, and distribution, organized on a worldwide scale and located in countries where competitive advantage can be maximized.
global supply chain
A ________ is the firm's integrated network of sourcing, production, and distribution, organized on a worldwide scale and located in countries where competitive advantage can be maximized. Decision making unit buying center global supply chain demand chain
global supply chain
Students in Professor Manning's international business class have been assigned the task of explaining the different types of FDI. Professor Manning formed groups among students. The groups are to research their assigned topic and present their information to the class using examples of real-world firms for illustration. Jessica Hanson is the leader of Group A; Manu Patel is the leader of Group B; and Mario Witherspoon is the leader of Group C.During his presentation, Mario describes how a large Japanese automaker built a factory in Kentucky. Which of the following topics was most likely assigned to Group C? greenfield investment equity joint venture horizontal integration consortium
greenfield investment
Which of the following refers to a risk, stemming from environmental factors, that is closely associated with global sourcing? high energy costs overreliance on suppliers rapid turnover of skilled employees weak intellectual property laws
high energy costs
An industrial design is intended to ________
improve a product's performance and marketability
An industrial design is intended to ________.
improve a product's performance and marketability
Prox Inc. is a U.S.-based manufacturer of consumer electronics. It decides to export to Mexico and wants to protect its goods against damage, loss, and pilferage. Which of the following documents is applicable here? license insurance certificate bill of lading pro forma invoice
insurance certificate
A collective mark ________.
is a logo belonging to an organization whose members use it to identify themselves and associate their products with a level of quality or accuracy, geographical origin, or other positive characteristic
The strategic view of global sourcing suggests that ________.
just as firms achieve gains in efficiency, productivity, quality, and revenues by leveraging offshore talent, they also obtain the means to turn around failing businesses, speed up innovation, restructure operations, and fund otherwise-unaffordable development project
Firms that anticipate close public scrutiny of their foreign operations often avoid potential difficulties by ________.
locating in culturally similar countrie
Which of the following is a major challenge often faced by focal firms that engage in global sourcing? lower-than-expected cost savings no control over the quality of outputs domestic management of local distribution increased costs of business travel
lower-than-expected cost savings
The greatest amount of licensing occurs in the ________ industries.
toy
Which of the following is an advantage of franchising to the franchisee? reduced expenses as the franchisor provides supplies, equipment, and products minimum initial investments or royalty payments are applicable use of a well-known, recognizable brand name franchisee holds much power, including superior bargaining power
use of a well-known, recognizable brand name
The reputation of a licensor will be jeopardized by a licensing agreement if the licensee ________.
uses the licensing asset to create products of poor quality